Maravi

Govt, Zanaco salvage crude oil financing deal

Govt, Zanaco salvage crude oil financing deal
By Joan Chirwa
Monday September 01, 2008 [04:00]

ENERGY minister Kenneth Konga has disclosed that government and Zanaco last week managed to salvage a deal out of the crude oil financing negotiations held by the two parties for a couple of months. Konga, in an interview, said the negotiating teams from the government and Zanaco held a meeting last Thursday to conclude discussions on the latter's bid to finance crude oil importation into the country.

He said Zanaco is therefore expected to finance the next shipment of 90,000 metric tonnes of crude oil, which is being supplied by the International Petroleum Group (IPG) of Kuwait.

"On Thursday, there was a meeting between government's negotiating team and the Rabobank negotiating team and I can say discussions have been concluded," Konga said. "The next shipment of the 90,000 metric tonnes of crude oil which is expected in the country after the completion of maintenance works at Indeni Oil Refinery.

As you know, Indeni will be shutting down this September for routine maintenance works and we cannot bring in the crude that time unless after works are completed."

The government earlier engaged in negotiations with Stanbic Bank over the financing of crude oil. Negotiations, however, stalled early this year as the Ministry of Energy disclosed that the bank wanted government to attach collateral matters to the contract.

IPG of Kuwait holds a two-year crude oil supply deal with a contract sum of US$1.2 billion (about K4.2 trillion).

However, Konga indicated that the contract sum is expected to rise largely on account of unpredictable oil price increases on the international market.

The contract involves 16 shipments of crude oil containing 90,000 metric tonnes each. Konga, in a ministerial statement delivered to Parliament early August, said the contract provides for the quantity of crude oil to go up to 120,000 metric tonnes.

Labels: KENNETH KONGA, ZANACO

posted by MrK @ 3:55 PM